At the Cheshire East Council meeting on 11 December 2014, Labour councillors supported a motion demanding that the Council should call on the United Kingdom Government to listen to the strength of public opinion and to act as a matter of urgency to end the injustice of tax avoidance by large multinational corporations, in developing countries and the United Kingdom.
Local authorities like Cheshire East have suffered huge cuts in their funding over the last five years.
These cuts have not been distributed fairly by the Tory Government.
Cheshire East has suffered cuts of under 5% of its funding, whereas Authorities like Liverpool and Stoke with much greater needs have suffered cuts of over 30%.
The Tory Government, if re-elected, means to cut funds to local authorities even further, which will have devastating effects on social services for children and adults, highway maintenance, cultural services such as libraries and grants to voluntary bodies and subsidies to local transport.
Labour Councillors are acutely aware that one of the reasons for the lack of proper funding for public services is the reduction in government’s tax receipts.
This is partly due to the low-paid jobs created by the coalition government and partly because of the low tax payments by very profitable multinational companies that transfer their profits made in the United Kingdom to low tax regimes overseas. Cheshire East Council collects over 99% of all council tax due.
If central government were as efficient as local government in collecting taxes then funding problems would be greatly eased.
Proposer of the motion, Crewe South Labour Councillor Steve Hogben, said: “All we seek is fair treatment for all taxpayers, great and small.
“There is much emphasis in government at national and local level on chasing individual tax-dodgers, but the corporate giants seem to escape pursuit. Starbucks is well-known for its very small tax payments, but there are others, like Amazon that currently faces investigation by the European Commission into its corporate tax practices, and Apple that has already been investigated.”
He went on: “Then there are the companies that have been spared the dreadful pain of paying billions in tax on profits from sales – like Vodafone – while at the same time banks pocketed hundreds of millions in fees and commissions.
“All this is an insult to ordinary people and businesses that pay their taxes, even when they are struggling to make ends meet.”
Councillor Hogben concluded: “Multinational companies must pay their fair share of tax and not receive favourable treatment that could amount to public subsidy for private profits.
“I believe the sentiments expressed in the old socialist saying, ‘From each according to his abilities, to each according to his needs’. The government must do more to make this happen”
Ken Edwards, Labour Councillor for Macclesfield Central, said: “Very low wages, zero hours contracts and the persistent lowering of the Corporation Tax rate have all worked to the advantage of companies.
“In addition artificial methods of income transfer such as transfer pricing, royalty payments, franchise payments and high interest inter-company loans all allow companies to reduce taxable profits declared and therefore tax paid.
“It is hardly believable but Starbucks, with 31% of market share in the UK, made a tax loss in 14 out of the last 15 years on its United Kingdom operations.
“We must find ways of reasserting the power of the state to properly tax these companies so they pay their fair share towards the services needed by ordinary people.
“We also need to introduce labour laws to outlaw zero hours contracts and to ensure that a living wage is paid to all employees.”
Sam Corcoran, Cheshire East Labour Group